Spain's house price growth continues to accelerate, amidst increasing property demand and strengthening residential construction activity.

This extended overview from the Global Property Guide covers key aspects of Spain's housing market and takes a closer look at its most recent developments and long-term trends.

Table of Contents

• Housing Market Snapshot
• Demand Highlights
• Supply Highlights
• Rental Market
• Mortgage Market
• Historic Perspective
• Socio-Economic Context

Housing Market Snapshot

Nationwide house prices rose strongly by 11.16% (8.71% inflation-adjusted) in Q1 2025 from the same period last year, to reach an average of €2,311 per square meter (sqm), according to figures from the online property information site Idealista. This followed a full-year growth of 11.21% (8.14% inflation-adjusted) in 2024 and 8.16% (4.9% inflation-adjusted) in 2023.

Quarter-on-quarter, house prices were up by 1.76% (1.13% inflation-adjusted) in Q1 2025.

Official figures released by the government also showed continued house price growth in the country, albeit at a more moderate pace. Data from the Banco de España indicated that Spanish house prices increased by 7.05% to an average of €1,972 per sqm in Q4 2024 from a year earlier. It was the highest y-o-y growth recorded since Q1 2007. When adjusted for inflation, house prices were up by 4.58%. Quarterly, nominal house prices rose by 2.66% in Q4 2024 (2.1% inflation-adjusted).

Spain's house price annual change:

On the other hand, the nationwide house price index published by Instituto Nacional de Estadística (INE) showed a stronger growth of 11.26% (8.7% inflation-adjusted) y-o-y in Q4 2024, marking the sharpest annual increase since recordkeeping began in 2007. Quarter-on-quarter, the index rose by 1.79% (1.23% inflation-adjusted) in Q4 2024.

By property type:

• Existing dwellings: prices increased by 11.09% y-o-y in Q4 2024 (8.54% inflation-adjusted), up from annual growth of 7.87% in Q3, 7.27% in Q2, and 5.65% in Q1. It was also the biggest y-o-y price increase in recent history. On a quarterly basis, existing dwelling prices were up by 1.97% (1.41% inflation-adjusted) in Q4.
• New dwellings: prices rose strongly by 12.26% in Q4 2024 from a year earlier (9.68% inflation-adjusted), following y-o-y increases of 9.84% in Q3, 11.22% in Q2, and 10.08% in Q1. Quarter-on-quarter, prices were up slightly by 0.78% (0.23% inflation-adjusted) in Q4.

All 19 autonomous regions in Spain recorded robust increases in house prices. Of which, Andalucía saw the biggest y-o-y price growth in Q4 2024 at 13.4%, closely followed by Aragón (13.3%), Navarra (12.9%), Melilla (12.2%), Valencian Community (12.2%), La Rioja (11.9%), Cantabria (11.8%), Asturias (11.7%), Murcia (11.7%), and Ceuta (11.4%).

Strong house price growth were also registered in País Vasco (10.7%), Canarias (10.6%), Castilla y León (10.6%), Galicia (10.5%), Cataluña (10.4%), Madrid (10.3%), Extremadura (9.1%), Castilla-La Mancha (8.7%), and Balears (8.6%).

Spain's housing market only returned to growth in 2015, having fallen by 36.3% (-42.9% inflation-adjusted) from Q3 2007 to Q1 2015, with existing home prices falling by as much as 43.1% (-49% inflation-adjusted), based on figures from INE. There were 24 consecutive quarters of y-o-y declines.

From 2015 to 2019, house prices increased by an annual average of 2.5% (1.6% inflation-adjusted). After a slight house price fall of 1.85% (-1.13% inflation-adjusted) in 2020 due to the adverse impact of the Covid-19 pandemic, the Spanish housing market bounced back quickly in the following years, with prices rising by 4.43% in 2021 and 3.25% in 2022. Yet in real terms, house prices are down, amidst soaring inflation.

Spain's housing market has strengthened in the past two years, with nationwide house prices increasing by a cumulative 12.74% (6.67% inflation-adjusted) in 2023-24.

The strong growth in house prices was supported by increasing property demand. During 2024, the total number of homes sold in Spain rose by 10% to 642,208 units as compared to a year earlier, according to the Instituto Nacional de Estadística (INE), following an annual decline of 10.2% in 2023 and increases of 14.8% in 2022 and 34.8% in 2021.

Property demand continues to increase this year. In January 2025, home sales rose further by 11% y-o-y to 60,650 units.

Residential construction activity is also picking up. In 2024, the total number of housing starts rose strongly by 14.5% y-o-y to 112,220 units, an improvement from a meager growth of 1.1% in 2023 and a decline of 3.5% two years ago, based on figures from the Ministry of Development. Likewise, housing completions also increased by 7.6% to 86,609 units in 2024, following a minuscule growth of 0.7% in 2024 and a decline of 4.9% in 2022.

The overall economy remains fundamentally strong. During 2024, the Spanish economy grew by 3.2% from the previous year, primarily driven by robust consumption, which was sustained by a strong labour market, and by continued growth in services exports. It followed economic expansions of 2.5% in 2023, 6.2% in 2022, and 6.7% in 2021, and a pandemic-induced contraction of 10.9% in 2020.

The International Monetary Fund (IMF) expects the Spanish economy to expand by a modest 2.5% this year, before gradually slowing to 1.8% in 2026. The European Commission, on the other hand, expects an economic growth for Spain of 2.3% this year and 2.1% next year. For Banco de España, the domestic economy will likely grow by 2.7% this year and by another 1.9% in 2026.

Demand Highlights:

Property demand increasing again

During 2024, home sales in Spain rose by 10% to 642,208 units as compared to a year earlier, according to the Instituto Nacional de Estadística (INE), following an annual decline of 10.2% in 2023 and increases of 14.8% in 2022 and 34.8% in 2021.

By property type:

• Existing dwellings: 507,282 units sold in 2024, up by 7% from the previous year. This is in contrast with the annual fall of 11.2% in 2023.
• New dwellings: 134,926 units sold in 2024, a huge increase of 23.2% from a year ago. This is in contrast with the decline of 6% in 2023 and the highest new dwelling sales recorded since 2013.

Eighteen of Spain's 19 autonomous communities and provinces saw an increase in demand last year. Ceuta recorded the biggest growth in home sales in the whole year of 2024 as compared to a year earlier, at 27.37%. It was followed by Galicia with a y-o-y sales increase of 22.31%, La Rioja (20.01%), Castilla-La Mancha (19.48%), Asturias (18.61%), Cantabria (16.37%), Navarra (15.99%), País Vasco (14.29%), Castilla y León (13.55%), Extremadura (12.27%), and Melilla (12.02%).

More moderate sales increases were seen in Madrid (10.55%), Aragón (9.79%), Murcia (9.52%), Valencian Community (9.03%), Cataluña (8.45%), Andalucía (6.85%), and Canarias (4.63%).

Only Balears registered a modest y-o-y sales decline of 3.8% in 2024.

Andalucía accounted for the biggest share in home sales during 2024 at 19.6%, followed by the Valencian Community with 16.3% share, Cataluña with 15.5% share, and Madrid with 12% share.

Property demand in Spain continues to increase this year. In January 2025, home sales in the whole country rose further by 11% y-o-y to 60,650 units. Over the same period, new dwelling sales skyrocketed by 30.9% while existing dwelling sales rose by 6.1%.

Land prices continue to rise, but transactions falling

The average price of urban land transactions in Spain stood at €175.5 per sqm in Q4 2024, up by 4.3% from the previous quarter and by 13.5% in the same period last year, according to the Ministry of Development.

Eleven of the 17 autonomous communities where figures are available saw land price increases in Q4 2024. Though land price movements vary considerably:

• In Madrid, the average urban land price in the city rose by 15.2% y-o-y to €335.5 per sqm in Q4 2024. Quarter-on-quarter, land prices were up by 8.7%.
• In Andalucía, land prices rose strongly by 26.4% y-o-y to an average of €192.5 per sqm. On a quarterly basis, prices increased slightly by 0.2% in Q4 2024.
• In Cataluña, the country's second-largest region, land prices were up by 17.2% y-o-y to an average of €199.6 per sqm in Q4 2024. It was also higher by 8.7% as compared to the previous quarter.
• In Castilla y León, the average land price was €76.1 per sqm in Q4 2024, up by 5.6% from the previous quarter but down by 2.3% from a year ago.
• In Galicia, land prices reached an average of €140.8 per sqm in Q4 2024, up by a whopping 70.2% from the previous quarter and by 46.7% from a year ago.
• In Castile-La Mancha, the average land price increased 19.2% y-o-y to €109.5 per sqm in Q4 2024. Quarter-on-quarter, prices were up by 5.6%.
• In the Canary Islands, the average land price increased by a modest 4.1% y-o-y to €261 per sqm in Q4 2024. Quarter-on-quarter, prices were up by 14.1%.
• In the Valencian Community, the average land price was €220.3 per sqm in Q4 2024, up strongly by 21.2% from the previous quarter and by 26.7% from the same period last year.

Demand for land in the country continues to fall. During 2024, the number of land transactions fell by 6.8% y-o-y to 20,856 units, following annual declines of 15% in 2023 and 11.7% in 2022, according to the Ministry of Development.

Likewise, the value of land transactions fell slightly by 1.7% y-o-y to €3.36 billion in 2024, after decreasing by 26.5% in 2023 and increasing by 3.7% in 2022.

Andalucía accounted for nearly 21% of the total number of land transactions in 2024, followed by Cataluña (17.7% share), Castile-La Mancha (13.9%), Valencian Community (9.3%), Castilla y León (8.5%), and Madrid (5.9%).

Spain ends Golden Visa Program for property investors

Before the Covid-19 pandemic, foreign homebuyers accounted for about 12% to 20% of all home sales in Spain annually, sharply up from just a 4.24% share in 2009. In 2018, foreign homebuyers bought over 65,500 homes in Spain, up 7.4% from a year earlier, following annual growth of 13.7% in 2017. The Balearic Islands are especially attractive to foreigners, with about one-third of the total demand coming from foreigners, mainly due to their white-sand beaches and sunny Mediterranean landscape. It is followed by the Canary Islands, the Valencian Community, Murcia, and Andalusia.

The Golden Visa scheme, applicable since 30th September 2013, has increased interest not only from the Middle East but also from Asia and Russia. Any non-EU national bringing more than €500,000 to invest is automatically granted a Spanish residency permit.

In 2019, Spain approved 1,422 Golden Visas to main applicants, up by almost 20% from a year earlier. Of which, 681 Golden Visas were granted to foreigners via the real estate option - an increase of about 13.7% from the previous year and the highest figure ever recorded.

However, foreign homebuying slowed in the following year due to the Covid-19 pandemic. Golden Visas granted to foreigners were just 162 in H2 2020 and 232 in H1 2021 - two of the lowest ever seen since the program was launched. Interest from foreigners started to increase again in the second half of 2022, as the overall situation normalized. In H2 2021, Spain granted 833 Golden Visas to main applicants, up from 574 in H2 2019.

Since the launch of Spain's Golden Visa program in 2013, real estate has been the dominant investment route, with 96% of applicants opting for property purchases, particularly in major cities. As such, over 6,200 visas were issued via property acquisition. In total, around 15,300 primary applicants and nearly 35,000 of their family members have secured residency through the program, with investors from China, Russia, the U.S., and the U.K. accounting for the biggest shares.

In 2023 alone, foreign buyers purchased over 87,000 properties in Spain, representing around 15% of total real estate transactions in the country. Demand has surged, particularly among British and American investors, especially after Brexit.

Foreigners have the right to buy and resell all kinds of property in Spain - residential, commercial, or land, with no limits.

However, because of the growing clamor to end the scheme in recent years, Spain formally eliminated the real estate investment option from its Golden Visa program on April 3, 2025. The government cited concerns that the scheme contributed to rising property prices in cities like Madrid and Barcelona, exacerbating housing affordability issues for local residents.

Existing visa holders and applicants who submitted before the cutoff date retain their rights, but no new applications are accepted under this route.

Supply Highlights:

Residential construction activity picks up

During 2024, the total number of housing starts rose strongly by 14.5% y-o-y to 112,220 units, an improvement from a meager growth of 1.1% in 2023 and a decline of 3.5% two years ago, based on figures from the Ministry of Development.

By region, Castilla y León registered the biggest y-o-y growth in housing starts of a spectacular 47.1% in 2024, followed by Ceuta (39.1%), Navarra (37.4%), Extremadura (30.8%), Madrid (23.2%), Balears (20.5%), Cataluña (19.6%), Galicia (17.7%), Andalucia (14.9%), and Canarias (10.4%). Moderate growth was seen in Asturias (9.7%), Castilla-La Mancha (9.4%), Valencian Community (8.7%), and La Rioja (3.7%).

In contrast, five regions saw falling housing starts last year, with Melilla recording the worst decline of 48.3%, followed by Murcia (-16.1%), Cantabria (-15.2%), País Vasco (-8.5%), and Aragón (-4.5%).

Andalucía accounted for the biggest share in housing starts last year at 22.3%, followed by Madrid (16.4%), Cataluña (13.6%), Valencian Community (11.3%), and Castilla y León (5.8%).

Likewise, housing completions also increased by 7.6% to 86,609 units in 2024, following a minuscule growth of 0.7% in 2024 and a decline of 4.9% in 2022.

Housing starts fell to an annual average of just 64,000 units in 2009-2021, from an annual average of 445,000 units in 1995-2008. Similarly, completions also dropped to an average of 64,000 units annually in 2011-2021, from 419,000 units in 1997-2010.

Latest figures showed that Spain's total housing stock totaled more than 26.9 million units, up slightly by 0.3% from a year earlier. Andalucia accounted for the biggest share of 17.2%, followed by Cataluña (15.3%), Valencian Community (12.4%), and Madrid (11.7%).

Rental Market:

Moderate rental yields

Spain's rent price index:

Gross rental yields on property in Spain stood at 5.6% in Q1 2025, down from 5.93% in Q3 2024, 6.17% in Q1 2024, and 6.09% in Q3 2023, according to research conducted by the Global Property Guide.

In the country's major cities:

• In Madrid, apartments offer gross rental yields ranging from 2.76% to 6.63%, with a city average of 4.82% in Q1 2025.
• In Barcelona, gross rental yields for apartments are relatively higher, ranging from 4.04% to 9.38%, with a city average of 7.52%.
• Valencia offers rental yields ranging from 3.3% to 7.43%, with a city average of 6.19%.
• In Córdoba, apartment rental yields are around 5.25% to 6.43%, with a city average of 6.05%.
• In Alicante, gross rental yields for apartments range from 4.04% to 6.62%, with a city average of 5.86%.
• Seville apartments offer rental returns ranging from 3.68% to 6%, with a city average of 5.11%.
• In Palma de Mallorca, rental yields range from 4.24% to 5.16%, with a city average of 4.74%.
• In Murcia, rental yields range from 3.74% to 7.82%, with a city average of 6.56%.
• In Malaga, rental yields range from 4.04% to 5.74%, with a city average of 4.99%.
• In Marbella, apartments offer rental yields ranging from 3.01% to 5.4%, with a city average of 4.67%.
• In Tenerife, gross rental yields range from 4.79% to 5.4%, with a city average of 5.11%.

Soaring residential rents

During 2024, rental prices in Spain rose strongly by 11.5%, reaching an all-time high of an average of €13.5 per sqm, based on figures released by Idealista.

Accordingly, the most expensive Spanish cities for renting a home, based on average rental prices, are the following:

• Barcelona is the most expensive city in the country to rent a home, with an average rent of €23.4 per sqm in 2024, up by 13.9% from the previous year.
• Madrid is the second most expensive city to rent, with an average rate of €20.7 per sqm by end-2024, up by a huge 15.3% from the preceding year.
• In San Sebastian, rental prices rose by 7.2% y-o-y in 2024, to reach an average of €18 per sqm.
• In Palma de Mallorca, the average rental price was up by 11.9% y-o-y to reach a record high of €17.2 per sqm.
• In Málaga, the average cost to rent a home reached a record high of €15.1 per sqm last year, up by 11.4% from the prior year.
• Bilbao's rental prices also increased significantly by 9.2% in 2024, to reach an average of €14.9 per sqm.
• In Valencia, rental prices surged by 12.2% y-o-y to an average of €14.9 per sqm last year.
• In Las Palmas on Gran Canaria, the average rental price for a home stood at €12.9 per sqm in 2024 - an increase of 10.9% from the preceding year.
• In Girona, the average rental price increased by a modest 3.8% y-o-y to €12.2 per sqm.
• In Seville, the average rent for a home stood at €12 per sqm by end-2024, up by 9.5% as compared to the prior year.

New rent control index introduced, replacing previous rent cap measures

Effective January 1, 2025, the Spanish government has introduced a new system for updating rental prices through the Housing Lease Reference Index (IRAV), developed by INE. This was mandated by Law 12/2023, the Right to Housing Act, which instructed the government to devise and implement a new curated index that will become the new benchmark for all rental contracts. This marks a significant shift from previous methods tied to inflation and follows recent government efforts to stabilize rental costs.

The IRAV replaces the use of the Consumer Price Index (CPI), which previously allowed rental increases in line with inflation. During the 2021-2022 inflation spike-when the CPI peaked at 10.8% in July 2022, many tenants saw sharp rent hikes. In response, the government introduced temporary rent caps: a 2% limit in 2022 and 2023, rising to 3% in 2024. These caps helped shield renters, who make up about 30% of the country's population, from soaring housing costs.

The new IRAV index is designed to provide more predictable and moderate rent adjustments. It is based on the lowest of three values: the annual variation of the CPI, the underlying inflation rate, and an adjusted average annual variation rate. Unlike the CPI, this composite approach aims to avoid extreme fluctuations and ensure greater stability in the rental market.

The IRAV applies to primary residence rental contracts signed after May 25, 2023, under Spain's Housing Law. Older contracts will continue to follow previously agreed terms. The index does not apply to temporary rentals, commercial spaces, rooms, or storage units.

Mortgage Market:

New mortgage loans increasing, but size of the mortgage market continues to shrink

During 2024, the total amount of new home mortgages in Spain rose strongly by 14.2% y-o-y to €61.73 billion, according to INE figures, in contrast to an annual contraction of 19.7% in 2023. From around €126.6 billion annually in 2003-2010, new home mortgages declined to an average of just €41.7 billion per year from 2011 to 2024.

Similarly, the total number of new mortgage loans increased by 11.2% to 423,761 last year as compared to the prior year, after declining by 17.9% in 2023. From an annual average of 1 million new home mortgages granted from 2003 to 2010, it declined to an average of 330,000 every year from 2011 to 2024.

Then in January 2025, the amount of new home mortgages surged by 26.6% y-o-y to €5.8 billion, and the number of new mortgages rose by 14.9% to 38,058.

As a result, the total value of mortgage loans outstanding rose slightly by 1.2% to €499.43 billion in February 2025, following a meager growth of 0.4% in 2024 and y-o-y declines of 3.2% in 2023 and 0.2% in 2022. Before this, total mortgages outstanding suffered an average decline of nearly 3% from 2012 to 2020.

Despite this, the size of the mortgage market as a percent of GDP continues to decline, plunging to about 31.3% of GDP in 2024, down from 33.1% of GDP in 2023, 37.3% in 2022, 41.5% in 2021, and 44.9% in 2020, based on estimates from the Global Property Guide. This is also far from the annual average of 60% of GDP from 2007 to 2014.

Spanish interest rates falling gradually

Following the ECB repo rate, interest rates in Spain have generally increased sharply from the last quarter of 2022 to the second quarter of 2024. However, with the recent ECB policy shift amidst easing inflationary pressures, mortgage interest rates are now gradually falling.

Spain's mortgage loan interest rates:

In February 2025, the average interest rate for new housing loans in Spain was 2.87%, down from 3.62% a year earlier and 3.52% two years ago, according to the European Central Bank (ECB).

New housing loans by initial rate fixation (IRF):

• Floating rate and up to 1-year IRF: 3.27% in February 2025, lower than the 4.01% in the same period last year and 3.83% two years earlier.
• 1-5 years IRF: 3.38% in February 2025, down from 4.07% in the previous year and from 4.02% two years ago.
• 5-10 years IRF: 3.78% in February 2025, slightly down from 3.97% a year earlier and far lower than the 4.7% two years ago.
• Over 10 years IRF: 2.62%, down from 3.12% in February 2024 and from 2.99% in February 2023.

For outstanding housing loans, the average interest rate was 3.19% in February 2025, down from 3.71% in the previous year but still higher than the 2.52% two years ago.

Outstanding housing loans, by maturity:

• Up to 1-year maturity: 3.57% in February 2025, lower than the 4.05% in February 2024 but still higher than the 3.05% registered in February 2023.
• 1-5 years maturity: 6.15% in February 2025, slightly down from 6.19% in the previous year but still up from 5.28% two years ago.
• Over 5 years maturity: 3.19%, down from 3.7% a year earlier but still up from 2.51% two years ago.

Spain's housing market has traditionally been extremely vulnerable to interest rate changes, given that before 2004, more than 80% of new mortgages had an IRF of less than 1 year, a proportion which rose to 90% from 2005 to 2006.

However, there has been a decline in the share of adjustable-rate mortgages (ARMs) from 2007 to 2022, falling to a record-low of just 24.8% share in July 2022.

While the proportion of ARMs began to rise again throughout much of 2023 and the first half of 2024, it has generally trended downward in recent months, signaling renewed caution or shifting borrower preferences amid changing financial conditions. In January 2025, adjustable-rate mortgages represented 35.8% of all new loans contracted, down from 41.8% in the same period last year, according to INE figures.

Foreclosures continue to fall

During 2024, foreclosures fell by 3.8% y-o-y to 12,655 dwellings, following annual declines of 23.2% in 2023 and 17.2% in 2022, based on figures from INE.

By dwelling type:

• Existing dwellings: 11,458 units in 2024, down by 4.1% from a year earlier, following annual decreases of 20.5% in the preceding year and 17.5% two years ago.
• New dwellings: 1,197 units in 2024, slightly down by 0.7% from the previous year, after falling by a huge 42.7% in 2023 and 15% in 2022.

However, there are wide regional variations. Of the autonomous regions and cities, Andalucía registered the biggest y-o-y decline in the number of foreclosures last year of 19.5%, followed by Ceuta (-14.3%), Valencian Community (-13.1%), Castilla-La Mancha (-5.4%), Madrid (-4.1%), and Cataluña (-3.5%).

In contrast, Melilla recorded the biggest increase in foreclosures in 2024 from a year earlier, at 233.3%. It was followed by Castilla y León (37.3%), Canarias (34.5%), Aragón (32.5%), Galicia (29.1%), Murcia (21.5%), Cantabria (16.3%), Asturias (15.6%), Balears (14.8%), Extremadura (13.1%), País Vasco (11.9%), La Rioja (7%), and Navarra (3.6%).

Andalucia, Cataluña, and the Valencian Community accounted for about 60% of all foreclosures in 2024.

Historic Perspective:

Spanish real house prices are still 31% below peak

From 1996 to 2007, Spain's national average house price rose by 197% (117% inflation-adjusted), one of Europe's highest house price increases. The price of coastal properties surged 250% (155% inflation-adjusted) from 1996 to 2007, as hundreds of thousands of foreigners, mainly from the UK, France, and Germany, bought the property.

In Madrid and Barcelona, house prices soared by 188% (109% inflation-adjusted) from 1996 to 2007, while prices in other inner provinces rose by 175% (101% inflation-adjusted).

Suddenly, in 2008, a housing slump battered the Spanish economy and brought spiraling unemployment. Developers were left with blocks of unsold properties and massive debts. Despite the price rises in recent years, nationwide house prices in 2024 were still about 6.2% (-31.3% inflation-adjusted) below peak levels.

Socio-Economic Context:

Spanish economy remains healthy, labor market strengthening

On January 23, 2014, Spain was the second eurozone country to exit its international bailout program, after Ireland. The Spanish economy has consistently outperformed much of Europe since. However, it has been a long, hard slog. Recession had been Spain's normal condition for years, due to the global financial meltdown and the Eurozone debt crisis.

The Spanish economy grew by an annual average of 2.8% from 2015 to 2019. Then the Covid-19 pandemic broke out, causing consumer demand and business investment to plunge. The economy contracted by a huge 10.9% in 2020 - one of the hardest hit in the region and the country's worst performance in recent history. Spain recorded a real GDP growth rate of 6.7% in 2021 and another 6.2% in 2022, enough to fully offset the pandemic-induced contraction in 2020.

During 2023, Spain's economic growth slowed sharply, registering a real GDP growth rate of just 2.5%, on the back of continuing geopolitical uncertainty, persistent high inflation, and rising interest rates.

Then in 2024, the economy grew by 3.2% from the previous year, primarily driven by robust consumption, which was sustained by a strong labour market, and by continued growth in services exports.

"The Spanish economy has continued to perform strongly, largely fueled by services exports and labor accumulation. Economic activity grew by 3.2 percent in 2024, underpinned by a continued expansion of services exports and a pickup in domestic demand," said the International Monetary Fund (IMF).

"Private consumption accelerated, supported by real income gains on the back of steady disinflation, solid nominal wage increases amid a tight labor market, and continued employment gains fueled by immigration. Investment, though, was more subdued, held back by multiple factors since the pandemic, including elevated domestic policy uncertainty," added the IMF.

The IMF expects the Spanish economy to expand by a modest 2.5% this year, before gradually slowing to 1.8% in 2026. The European Commission, on the other hand, expects an economic growth for Spain of 2.3% this year and 2.1% next year.

For Banco de España, the domestic economy will likely grow by 2.7% this year and by another 1.9% in 2026.

"Economic growth is projected to gradually slow down over the coming quarters, to rates more in line with the Spanish economy's potential growth, which will stand at just under 2% at the end of the projection horizon. Specifically, GDP growth is expected to decline from 3.2% in 2024 to 2.7% in 2025, 1.9% in 2026, and 1.7% in 2027," said Banco de España in its latest macroeconomic projections.

In March 2025, nationwide inflation eased to 2.3%, down from 3% in the previous month and 3.2% in the same period last year, mainly driven by a sharp slowdown in housing and utility costs, according to INE. While it remains above the average of just 1.1% from 2010 to 2020, it is now edging closer to the ECB's target of 2%. Inflation in Spain reached a nearly four-decade peak of 10.8% in July 2022.

Spain's budget deficit was equivalent to about 3.3% of GDP last year, according to the Bank of Spain, an improvement from shortfalls of 3.6% in 2023, 4.8% of GDP in 2022, 6.7% in 2021, and 10.1% in 2020. However, it remains above the pre-pandemic deficit of 3.1% of GDP recorded in 2019.

The deficit is projected to decline further to 2.8% of GDP this year and to 2.6% in 2026.

"The improved balance over the projection horizon continues to be largely driven by the discontinuation of the remaining temporary relief measures introduced in response to the energy crisis and the gradual elimination of the extraordinary expenses associated with various court decisions and the October flash floods," said Banco de España.

The country's gross public debt declined to around 101.8% of GDP in 2024, down from 105.1% in 2023, 111.6% in 2022, 116.8% in 2021, and an all-time high of 120.3% in 2020 due to the introduction of pandemic-related stimulus packages.

The labor market continues to improve. The nationwide unemployment stood at 10.61% in Q4 2024, down from 11.21% in the previous quarter and 11.8% a year earlier, according to INE. This was the lowest level registered since Q2 2008.

Over the same period, male unemployment was 9.53% while female unemployment was higher at 11.83%.

The total number of unemployed persons in Spain fell to 2,595,500 in Q4 2024, down by 265,300 people from a year earlier.

Unemployment in Spain averaged about 22% from 2010 to 2017 before falling to an annual average of 13.8% in 2018-24.

Sources:

• Housing Price Index (HPI). Base 2015. Fourth Quarter 2024 (Instituto Nacional de Estadistica): https://www.ine.es/
• History of sale prices in Spain (Idealista): https://www.idealista.com/
• Urban land price statistics (Ministerio De Transportes, Movilidad y Agenda Urban): https://apps.fomento.gob.es/
• Statistics on Transfer of Property Rights (STPR). January 2025. Provisional data (Instituto Nacional de Estadistica): https://www.ine.es/
• General economic statistics (Banco de España): https://www.bde.es/
• Is the Spain Golden Visa Program Ending: What's Next for Investors? (Get Golden Visa): https://getgoldenvisa.com/.
• Spanish Golden Visa Approvals Up 43% in First Half of 2021 (IMI Daily): https://www.imidaily.com/
• Golden visas in Spain in 2019 (Idealista): https://www.idealista.com/
• Spain Fades, Italy Rises: What's Next for Golden Visa Investors (IMI Daily): https://www.imidaily.com/
• Free housing (Ministerio De Transportes, Movilidad y Agenda Urban): https://apps.fomento.gob.es/
• Estimation of the housing stock (Ministerio De Transportes, Movilidad y Agenda Urban): https://apps.fomento.gob.es/
• The cities with the most expensive rent in Spain (Idealista): https://www.idealista.com/
• Gross rental yields in Spain: Madrid, Barcelona, and 9 other cities (Global Property Guide): https://www.globalpropertyguide.com/
• The new index for rent updates in Spain, how does it work? (Idealista): https://www.idealista.com/.
• New rent-control index comes into force countrywide (Spanish Property Insight): https://www.spanishpropertyinsight.com/
• Spain's new rental index (IRAV): What it means (RICS): https://surveyspain.com/
• New Housing Law in Spain (2025) This is how it will affect landlords, tenants, and students (Relomar): https://www.relomar.com/
• Will Rental Housing Prices Rise in 2024? Limits and New Developments to Consider (News SpainHouses.net): https://news.spainhouses.net/
• Key ECB interest rates (European Central Bank): https://www.ecb.europa.eu/
• Mortgages. Monthly. (Instituto Nacional de Estadistica): https://www.ine.es/
• Mortgages. Annual. (Instituto Nacional de Estadistica): https://www.ine.es/
• Statistics on Foreclosures (Instituto Nacional de Estadistica): https://www.ine.es/
• Economic forecast for Spain (European Central Bank): https://economy-finance.ec.europa.eu/
• Why is Spain's economy booming? Thanks to migration, which proves xenophobia doesn't pay (The Guardian): https://www.theguardian.com/
• Spain raises 2025 growth forecast to 2.6% (Reuters ): https://www.reuters.com/
• How Spain's economy became the envy of Europe (BBC): https://www.bbc.com/
• Spain: Staff Concluding Statement of the 2025 Article IV Mission (International Monetary Fund): https://www.imf.org/
• Quarterly National Accounts of Spain. Fourth quarter of 2024 (Instituto Nacional de Estadistica): https://www.ine.es/
• Macroeconomic projections and quarterly report on the Spanish economy. March 2025 (Banco de España): https://www.bde.es/
• Consumer Price Index (CPI) March 2025 (Instituto Nacional de Estadistica): https://www.ine.es/
• Spain | Fiscal Watch. March 2025 (BBVA Research): https://www.bbvaresearch.com/
• Active Population Survey (EPA) Fourth quarter 2024 (Instituto Nacional de Estadistica): https://www.ine.es/